However small it may be, Australia's trade deal with the US this month is widely seen as a bitter blow for New Zealand. That said, all bilateral deals in which New Zealand isn't involved are a blow to us, says our most noted trade negotiator, Mike Moore.
The country, cosy within its relatively buoyant economy, is in danger of missing out on other opportunities if it doesn't keep up the trade momentum, he says. Speaking from a hotel in London, the former New Zealand prime minister and director-general of the World Trade Organisation (WTO) side-steps questions on the pros and cons of the Australia/US deal.

"People should be saying firstly, 'what's in it for the world?'," says Moore. A multilateral trade deal would be worth trillions of dollars to world trade, he says. "It would be like adding another China to the world economy."

The latest rush of bilateral and regional deals is dangerous economically and politically because it diverts attention away from the main goal of a multilateral trade deal giving everyone a percentage, he says.

"It might be OK for Australia, and even for New Zealand, but the majority of small countries don't have the resources to negotiate at all these levels." Regional deals also skew rules of origin, don't provide dispute systems and generally avoid - as the Australia/US deal does - the tough issues such as agriculture, Moore points out.

But without meaningful breakthroughs in the WTO's multilateral trade negotiations, he says, it's not surprising many countries are taking the bilateral path. New Zealand is doing the right thing by pursuing bilateral and multilateral deals. "Yes, it sounds contradictory, but I'd do both, too. I'm an opportunist." Our priorities should be on the larger markets such as China, India and America, says Moore. He welcomes New Zealand's deal with Russia which, he says, he helped to orchestrate in his role as a well-travelled, unofficial New Zealand trade ambassador.

Taking advantage of Russia's bid to join the WTO, New Zealand jumped in ahead of larger competitors to sign a deal with Russia last November, ahead of its WTO accession this year. Russia was attracted to the deal by its need to shore up its trade credentials as part of its WTO bid, and progress was speedier than normal.

It takes a significant amount of manpower - or civil servant power - to do trade deals, says Moore. The more you do, the more tied up your people become and the less they can focus on the big picture. New Zealand has the skills and the people, he adds, but many other nations do not.

"Multilateral talks are easier for the smaller guys," he says. "Everyone's knocking on the doors of the US, China, Europe and Japan - you can understand that - but who is knocking on Botswana's, New Zealand's or Uruguay's? Which is why it always annoys me when I see some non-governmental organisations out there protesting about the lack of democracy and participation of the small guys. (The WTO) is the only place where they can participate as equals . . . just one country can block the whole thing."

Moore, who is now a consultant, with many honorary, part-paid and fully-paid positions with universities, businesses and non-political organisations such as the United Nations, says his heart is still firmly in the multilateral trade camp. Tariffs and subsidies are just taxes, he says, that prop up unprofitable industries and stymie growth and development.
The Uruguay round - the eighth and last round of negotiations, completed in Marrakech in April 1994 - was worth billions of dollars a year to New Zealand and is one of the reasons why our country is doing well economically, says Moore. "And this round will be worth a hell of a lot more."

Moore says he's confident that, despite the collapse of talks in Mexico last September, the round scheduled for Hong Kong in late 2004-early 2005 will succeed. "The question is how deep and how long." Meanwhile, he points to a "cat door, rather than window, of opportunity," that New Zealand can "dock on" to the Australian/US deal. New Zealand must keep in step with our larger neighbour, he says. Australia's bigger market is naturally more attractive to potential investors and anything that broadens that gap will not help the government's stated aim of restoring New Zealand to the top half of OECD economies.
Stressing that he's a great advocate for New Zealand, he adds this is not the time for New Zealand to be resting on its laurels. "The biggest problem we have is that things are going very well and therefore we're a little smug and a little self-satisfied." The right time to "fix the roof . . . is when the sun is shining".

Noting some New Zealanders are still too inward-looking, he says we have got this far by embracing change. Despite the concerns some had about the government's focus on newer industries like tourism and education, these now drive our economy, he says. Educating foreign students is now our fourth-largest export sector. But some people would be happier to see sheep driven down Auckland's Queen Street to be shipped off to the old country than tourists and students tucking into those same sheep at home, says Moore." What also disappoints is some Kiwis' disbelief that people in Singapore have a better life expectancy or that other countries have better holiday and health systems: "We are in the bottom half of OECD tables, not near the top."

Does Moore hanker to come back and sort it out? No, he says. He might have sold his Geneva residence and put the money into "something a bit better than a bach" at Auckland's Omana Beach, but he plans to spend a few more years in Europe yet.
Moore says he left parliament after 25 years with an overdraft. "And I still need to give capitalism a bit of a go for a couple more years so I can spend more time on good works.
"I'm still a true believer," he says.

* Moore's speech, How New Zealand is Perceived Abroad, will be broadcast at the EMA's Go Global conference on Friday in Auckland.

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